After his recent session with Upscale C-Suite, Graze founder and CEO, Anthony Fletcher, shares his journey of scaling a UK business internationally and into the US market
Making the decision to launch into new territories, and take your business international, is the easy part. It is how you get there that often causes the most sleepless nights, as there are numerous different paths you can take.
For graze (Future Fifty company), we only had to look at the size of the US snack market to know that we wanted a piece of it. Our ultimate mission is to be the number one healthy snack brand in the world. America’s snacking and food retail markets are more than eight times the size of the UK’s, and clearly presented the biggest opportunity for us across the world to scale our business. It was important for our growth ambitions to make inroads into this geography, before other competitors beat us to it and got too much of a stranglehold on the market.
But there’s more than one road to Rome. Or in our case, America. There are different ways to get a foothold into an international market, and which determine how much of a local presence you need.
As an online business, founded on the notion of sending our snacks direct to our consumers through the post, theoretically we could have embarked on this journey without leaving English soil. The first baby step could have been distributing from the UK, using our existing manpower and manufacturing resources, without hiring employees or investing in office space abroad. For many tech startups and online businesses, this is often the easiest and most obvious way of going international and scaling your company.
However, working with perishable goods like food, this wouldn’t have been a sustainable or realistic model for us long term. We pride ourselves on our service and the freshness of our products, and without boots on the ground in America, we are unlikely to have been as successful as we have been. The quality of our snacks and the speed at which they were delivered to people’s homes and offices would have suffered if we didn’t open up operations in the US itself.
In our industry, we were also acutely aware that a local presence and native legal team were necessary to ensure we were maintaining the correct compliance with the US authorities and food regulators. Given the discrepancy in legislation and trade standards across different countries, it’s best to rely on natives who know this inside out and can advise on any issues that may need addressing. Competitors can be vocal in exploiting any unintended breaches you make, and it’s not worth the risk.
This also spills over into marketing, with the risk being that your concepts will get lost in translation. The British sense of humour and quirkiness doesn’t always travel well, and to avoid confusion or embarrassment, it’s safer to rely on a local marketing team to reach a new audience. They will understand the demographic you need to reach, and how best to do this, more than you ever could.
Even once you know you need a local footprint in a new territory, the next question is that of size and scale. You could decide to set up shop within a certain boundary, and focus on servicing a limited area first.
Most companies certainly won’t go international like graze did. Rather than rolling out slowly and incrementally across the country, we wanted to launch in every US state at once, and reach customers the length and breadth of the USA immediately. Offering a subscription service, it would have been against our ethos to impose restrictions on delivery and eligibility, and would have also been hard to reconcile with our online marketing campaigns and social media presence, which know no barriers. The dream for us was jumping in feet first – and we were confident we could do use our innovative technology to manage and understand the risks in this strategy.
We conducted early minimum viable product tests out there first to collect all the data we needed to de-risk some of the big questions, and figure out what would be our main challenges. For instance our trial period unearthed a significant problem with the US postal system. Their mail network is much slower and less reliable than in the UK – a box was taking two weeks just to get from our distribution centre in New Jersey to Manhattan.
We developed a unique ‘Postal Brain’ algorithm to navigate the problem – sending 10,000 cardboard bunnies across the states with tracking barcodes on, in order to determine the most efficient way to post boxes to different places. The data we collected was eye opening for the US Postal Service themselves, and presenting our findings to them helped foster a strong and fruitful working relationship with them. Overcoming this hurdle was imperative to ensure that our direct to consumer business model was viable across all states in America.
In addition, rolling out everywhere also meant opening ourselves up to the onslaught of consumer tastes and preferences across the country. The technology and vertical integration in our supply chain meant we could fail fast and learn from our customers as we went along. American consumers are much more transitory, and you need to be consistently innovating and evolving to keep up with changing tastes and preferences state-by-state. Utilising our customer feedback ratings effectively and cleverly meant we could localise our products along the way, and refine snacks along the way. We’ve localised 90% of our range to suit the American market, creating new products like our cinnamon rolls.
There’s no universal right or wrong way to go international. Whether you commit to setting up local infrastructure, or run operations purely from the UK, the process is still the same. It’s still a huge leap, and understanding the risks and testing the market to overcome them, is key to ensuring you land on your feet.